Is the Fed fueling a giant stock market bubble?
John Maxfield , The Motley Fool12:25 p.m. EDT July 27, 2014
Take a good look at the chart below and you’d be excused for concluding that we’re in the midst of the greatest stock market bubble of all time. Not only has the S&P 500 fully recovered from the financial crisis, it’s a staggering 30% higher than the peaks of the Internet and housing bull markets.
But is this really the case? With unemployment still above 6%, how could we find ourselves in the throes of yet another brewing catastrophe? Didn’t investors and analysts learn anything from the past decade and a half?
While it requires some explanation, the answer is that we’re most likely not experiencing another irrational inflation of stock prices. The market’s record level is instead a predictable response to the Federal Reserve’s policy of keeping interest rates at historically low levels.
https://www.usatoday.com/story/money/markets/2014/07/27/is-the-fed-fueling-a-giant-stock-market-bubble/13172261/
Low interest rates.
Companies buying back their own shares.
Still lots of cash sitting on the sidelines waiting for? Probably will miss the gains.
People buying stock in internet companies that make nothing and are not profitable are fueling a bubble.
Someone creates an app and there are no barriers to entry. Anyone who knows how to program can write a similar app and steal your customers. Worse yet, the world is growing tired of social apps. We are networked together 24/7 and still we are not social.